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Even beforePAuaeUAEUNUAEPAYour browser does not support the element. the ceasefire in Gaza Donald Trump had begun to reshape the Middle East. He was influential in pushing Israel to a truce with Lebanon in November. The fragile deal struck between Israel and Hamas on January 15th further reduces the intensity of the fighting in the region and resets Israel’s domestic politics. It will also reinforce the president-elect’s power over the Arab states that helped broker the deal, and over Binyamin Netanyahu, the Israeli prime minister.He will need all the leverage he can get. As Mr Trump enters the White House, he and his advisers face huge decisions about what policies to pursue in a region that has been transformed since his first term.One dilemma is how much effort Mr Trump should expend on the region. In his first term he pushed the Abraham accords, which normalised relations between Israel and several Arab states, and drew up a peace plan for Israel and the Palestinians (which was quickly shelved). His second stint as president brings knottier questions, like who should govern the ruins of post-war Gaza. The other dilemma is choosing between competing visions of the region’s future: whether to enable Israel’s hard right, or constrain it in pursuit of a grand bargain with Saudi Arabia.Such a bargain would potentially have a knock-on benefit, of creating a stronger grouping of Middle East countries opposed to Iran, making it easier for America and its allies to contain the Islamic Republic or weaken it further and force it to the bargaining table. Mike Waltz, the incoming national security adviser, calls it a “huge priority”. Mr Trump sees it as his ticket to a Nobel peace prize.The agenda of right-wing Israelis remains ambitious. They dream of rebuilding settlements in Gaza and of annexing the occupied West Bank (see map), and are bullish about Israel’s recent incursions into Lebanon and Syria. One of the most extreme individuals in Mr Netanyahu’s coalition is Bezalel Smotrich, the hard-right finance minister. He has already spent the past two years trying to bring about a de facto annexation of the West Bank, pushing through bureaucratic changes that make it easier to expand Jewish settlements there. He has also worked to bankrupt the Palestinian Authority (), which governs parts of the territory, in part by freezing tax revenues collected on its behalf.When the United Arab Emirates () normalised relations with Israel in 2020, under the Abraham accords, it extracted a concession from Mr Netanyahu, who abandoned a plan to annex parts of the West Bank. Emirati officials could claim they acted to support the Palestinians, staving off a plan that would have killed the hope for an independent Palestine.But Mr Netanyahu had not sworn off annexation for ever. “The word ‘suspend’ was chosen carefully by all parties,” said David Friedman, then America’s ambassador to Israel. “It’s off the table now, but it’s not off the table permanently.” In private, American and Arab diplomats said Israel had promised not to pursue annexation until the end of 2024.The project of an expansive Israel also has sympathisers within Mr Trump’s swirling group of advisers, among them Mike Huckabee, tipped to be the next ambassador to Israel, an evangelical Christian who believes there is “no such thing as a settlement”. Yet for all that, the Gaza ceasefire points in a different direction. Many of Mr Trump’s close advisers—including his son-in-law, Jared Kushner, and his Middle East envoy, Steve Witkoff—have ambitious plans for regional diplomacy. Allowing Israel to annex the West Bank would scuttle those and lay the groundwork for renewed conflict with the Palestinians.A major consideration is Saudi Arabia. Muhammad bin Salman, the Saudi crown prince and de facto ruler, is eager for a deal that normalises relations with Israel. He sees it as the gateway to better relations with America, which has offered a formal defence treaty, nuclear co-operation and other sweeteners. The plight of the Palestinians does not move him as it does older Saudi royals. Before the war Prince Muhammad was willing to make a deal that offered them few benefits: he wanted Israel merely to make a gesture towards ending its occupation. But the past year has forced him to take a tougher stance.In a televised speech in September, Prince Muhammad said the kingdom would not normalise relations with Israel until a Palestinian state was established. Well-connected Saudis expect the crown prince will eventually soften his position. But for now the bar seems high.Some officials in Washington and Jerusalem wonder if they might use the threat of annexation as a lure. The Saudis would be presented with a choice: normalise relations with Israel, or Mr Netanyahu will let his coalition partners move ahead with their plans. Perhaps such an ultimatum, the thinking goes, would give Prince Muhammad an excuse to do the deal.But the crown prince cannot act as freely as his Emirati counterpart. He has plenty of enemies in the kingdom: royals, clerics and spies whom he crossed on his rise to power. He also has 19m citizens to worry about, compared with just 1m in the . Some are already grumbling about an economic programme that has made them feel poorer. Many believe Israel is committing genocide in Gaza. Prince Muhammad is said to have told American interlocutors he fears going the way of Anwar Sadat, the Egyptian leader assassinated after he made peace with Israel.A deal establishing diplomatic relations between Israel and Saudi Arabia will have to go far beyond ruling out annexation. The Saudis will want a credible Israeli commitment to Palestinian statehood. That, in turn, requires a reset of Israeli politics, with Mr Netanyahu facing down the hard-right parties that he has come to rely on in order to build a viable coalition.The Gaza ceasefire showed a new dynamic in play, with Mr Trump putting pressure on Mr Netanyahu, who then overruled the extremists in his cabinet. But Mr Netanyahu has yet to fully cross the rubicon: he continues to maintain that the war has not ended and that Israel seeks a total victory over Hamas. Far-right lawmakers have threatened to leave the coalition over the ceasefire—although that might be an empty threat, with polls showing they would fare poorly in early elections.What if Mr Netanyahu calls their bluff? He, or a future Israeli leader, could pursue a grand bargain backed by Mr Trump. But a huge outstanding question would still remain: the status of Gaza. Hamas has lost its top leadership and thousands of fighters during the war, but it has had no trouble finding more amid the strip’s teeming misery. “We assess that Hamas has recruited almost as many new militants as it has lost,” Antony Blinken, America’s secretary of state, said in a speech on January 14th.The group’s past wars with Israel followed a familiar pattern. Gaza endured days or weeks of bombardment. Once a ceasefire took hold, donor countries stepped in to fix the damage. Hamas retained its grip on power. It hopes to do the same this time. If it does, though, it is unlikely Gaza will be rebuilt soon.The estimates that there are now 40m tonnes of debris in Gaza, enough to fill New York’s Central Park to a depth of eight metres. Hundreds of thousands of homes have been destroyed; experts think it will take until at least 2040 to rebuild them. With the economy in ruins, almost the entire population will depend on foreign aid. Reconstruction will cost tens of billions of dollars—but few Western or Arab donors will be willing to work with a Hamas-led government.Saudi officials say they are keen to help the Palestinians, but they want Hamas out of power. So does the , which has a warm relationship with Israel and loathes Islamist groups. Qatar is friendly with Hamas, but it worries about the diplomatic consequences of funding the group, especially with Mr Trump returning to office.Hamas will not find it easy to wield power in post-war Gaza—but there are also no easy alternatives to its rule. Mr Biden had been keen for the to take control of the territory. Mr Netanyahu refused even to discuss the idea, let alone pursue it; he hoped to dump the job on Arab states. Mr Trump’s views are a mystery. If he does not pursue a viable plan for governing the strip, the ceasefire will remain fragile: reconstruction is meant to be part of the deal. Israel will remain isolated. Ending the war will not buy it much goodwill if Gaza still resembles an enormous refugee camp.Much has changed in the Middle East. That does not mean anything is possible, though. A Saudi-Israeli deal is a realistic goal in the next four years, but it may not be possible to strong-arm the Saudis.Nor will Mr Trump negotiate that deal in isolation. He has also promised another round of “maximum pressure” aimed at forcing Iran into a diplomatic agreement that restrains its nuclear programme and, perhaps, its support for regional militias as well. The events of the past year have left those militias deeply weakened. Hizbullah, the Iranian-backed Shia group in Lebanon, is no longer in a position to menace Israel. The Assad regime in Syria has collapsed, yielding to an interim government that seeks accommodation with Israel.Empowering Israel’s far right would jeopardise these gains: the Palestinian cause can still mobilise violence and unrest across the region. On the other hand, a durable peace in Gaza and a fair settlement for the Palestinians would get Mr Trump the deal he covets—and probably the peace prize, too.